When an Economy Is Temporarily Operating at an Output That

question 188

Multiple Choice

When an economy is temporarily operating at an output that is beyond its full-employment rate,

• A) excess supply in resource markets will eventually lead to lower resource prices, which will decrease costs and direct the economy toward full employment.
• B) excess demand in resource markets will lead to higher resource prices, which will increase costs and direct the economy toward full employment.
• C) lower wages and prices will quickly restore full employment.
• D) only restrictive fiscal policy will direct the economy back to full employment.

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Definitions:

Custodial Model

A management theory primarily used in prisons and psychiatric hospitals, focusing on control and security of the individuals within the facility.

Scientific Analyses

are the examination and evaluation of data or findings through systematic and empirical methods in the pursuit of knowledge.

Total Quality Management

A comprehensive management approach that focuses on continuous quality improvement of products and services by incorporating all members of an organization.

85/15 Rule

A principle suggesting that 85% of the success of an organization is due to system and process, while 15% is due to the work of individuals.